Guest Post from Nicholas Migliaccio
My conclusion why you pay for Bankers crimes :
I contend that Big Banks have De Facto Immunity for crimes, foreign and domestic, in exchange assisting the US Treasury enforce US Global Financial policies. The Banks can get away with murder, maybe literally, in a modern example of “Quid pro Quo”(This for That) where upper Bank personnel are safe from fines and jail time. The Bankers know they will not go to jail, or, as a worst case, the Bank will be fined, and it treated as a cost of doing business, ultimately paid for by all of us. My reading tells me that no upper level employees ever missed a bonus let alone a conviction with punishment.
I think a clear picture of the problem emerged in the UK Telegraph’s article on April 16th, 2014 “US FINANCIAL SHOWDOWN WITH RUSSIA MORE DANGEROUS THAT IT LOOKS”. by Ambrose Evans-Prichard on April 16, quoted in Newsweek: “The Treasury has deputized the entire US financial system to achieve its foreign policy goals”. Based on the recent book “TREASURY’s WAR” by Juan Zarate, former White House and Treasury Official, US Prosecutor, outlines the nature of the global nature of the effects of Sec 311 of the Patriot Act, designating countries, organizations and individuals as money-launders.
Thus the banks are the enforcement muscle (much like the Mob) of Treasury’s overseas activities. Several White House Peer Review papers suggest that these enforcement duties should remain Treasury functions. In Treasury’s desire to protect the US and extend the “Anaconda Strategy” developed by the North, while fighting the South in the Civil war, they can designate a country, bank or individual as a “Money Laundering Center”, with which everyone involved with them, upstream or down, is then declared OUTLAW, ‘persona non gratis’, and more radioactive than Fukushima. No one, for fear of being barred from the lucrative capital markets of New York City, will deal with them. Their lifeblood, cash flow, stops. Without JPM, BOA, CITI, Goldman, and Morgan Stanley, little money can be raised until other capital centers develop. That was a practical reason as well as symbolic reason the “911” attackers targeted New York and the Twin Towers. It is the beating heart of Global capital markets.
All of us know the “Systemically Important” Entities, critical to US Global Strategy. Americans and people globally, are aware of the legion of unprosecuted crimes committed by Big Banks. But when Banks break laws with impunity due to their De Facto immunity, a serious moral hazard exists. Other bank executives are emboldened to new heights of criminal activity and this creates more “unindicted co-conspirators”. I believe this is unconstitutional, bad practice, bad policy for the USA, and that it will have terrible long term consequences, already showing in the huge loss of respect for the USA’s integrity and Rule of Law.
Contrast that NY Times notes that there were eight hundred forty-nine (849) convictions after the “Keating” Savings and Loan Scandal in the ’90s, and but only one (1) conviction since this meltdown began in 2006, and that was an Egyptian born Credit Suisse employee. None of the so-called TBTF bank personnel were imprisoned. I don’t think these banks are “Too Big To Fail,” however they are “Systemically Important” Entities. These Banks are not allowed to fail as they are the Muscle for US Global Financial Policies. US Treasury Anaconda Strategy cutting off cash flow, to entities they designate as “Primary Money Laundering Centers”, is an effective short term tactic, with serious negative long term strategic implications for the USA. De Facto immunity for Big Banks, has the current situation spinning out of control, a loose cannon on a stormy deck, injuring friend and foe. The people of the US deserve a respected Rule of Law, not one for Banks, and one for Others. Injuries by Banker Crimes are legion, from false home repossessions, to usury, to front running trades and rigging markets for their no-brainer profit trades. Do any readers NOT know someone so injured? Does anyone know anyone sent to jail for these crimes? The very fabric of our society is being rent asunder for Banker profits.
Of course the proof that my contentions here are wrong, would be the vigorous prosecutions of those banks whose crimes have not passed the statute of limitations. The old Populist slogan addressing low corn prices was: “Raise more HELL, and less corn”; which may be metaphorically is the solution here. First it is clear the Big Banks and the Treasury that is supposed to regulate them, must be separated, and the Banks and Bankers prosecuted for their crimes including jail time. Having Treasury depend on the Banks to enforce their rules, looks unconstitutionally incestuous to me, without checks and balances. An oligarchic state is ruled by Banks and other large interests, a Republic or a Representative Democracy is not.
What happens next is critical in determining who rules. Restore Treasury enforcement of its regulations, foreign and domestic. Impose Real Regulation of the Banks and Financial Sector. Prosecute Bank Crime and adjudicate Jail Sentences upon the guilty, not just fines. The US may be feared, but not respected. That could turn to contempt and tends to weaken the US Dollar in value and in status as a Reserve Currency. Myriad challenges to the US DOLLAR as a Reserve Currency are in progress as we read this, and actually putting our Financial Sector back under the Rule of Law, may seriously retard, diffuse and deflect some of these challenges.
DENALIGUIDE, June 15, 2014 http://www.denaliguidesummit.blogspot.ca/
Note: The GDX – gold miner ETF hit its low on May 28 around $22. Nick’s “Peak Performance Picks” from May 30 had this to say:
“bottomed out,” and “rally forth.” His gold miner volume oscillator and gold miner breadth oscillator are shown below.
It turns out that he was right! (The Deviant Investor)
“When plunder becomes a way of life for a group of men living in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.” F. Bastiat
Guest Post from Nicholas Migliaccio
aka Deviant Investor
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